Natural Gas Price Analysis – Natural Gas Continues to Show Seasonal Effect

Natural Gas Technical Analysis

Natural gas markets have been noisy in early Wednesday trading, but we are still pretty depressed when it comes to pricing. Just above, we have the 50-day EMA and the $3 level both could offer a bit of resistance as well from a technical analysis standpoint.

Ultimately, this is a market that tends to be very seasonal, and this is one of the lowest times of year as far as demand is concerned, as the heating situation is all but nothing in the United States, and of course, the temperatures, although warm in the U.S., have not been horrifically hot.

The oversupply of natural gas is typical this time of year, and it is really strong this year. So all things being equal, this is a market that is still trading in that somewhat depressed state that we would expect right now. Here in a couple of weeks, we’ll roll over to the October contract, and then we can start to think a little bit about fall.

And that could offer a little bit of hope. We’ll just have to wait and see. Typically speaking, though, it’s really when we start to get forecasts of cold weather and sudden drops in temperature in the United States that natural gas starts to take off. It’s a completely abundant asset. The commodity is everywhere, and the United States is nowhere near running out of it.

With that being the case, there is still a lot of downward pressure, as the supply has overwhelmed demand for months now. This is something the market is keenly aware of at the moment.

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